Thursday, July 2, 2015

Interview with Tom

This interview on business review Canada was posted on July 1st, 2015

Here is a link to to the full interview -- a path to power

This is included in the full July edition of Canadian Business Review -- Canadian Business Review July 2015 (see pages 26 to 35)

Article is written by Jennifer White and produced by Andy Turner


Key Excerpts

Excerpt 1:

"The strength of the company is based on the people,” he said. “Led by Dr. Herman Grütter, who is extremely well-known in diamond exploration circles, I’d venture to say that our technical team is second to none."

Analysis:

Here is a listing of the team on this blog -- Team Chidliak

Excerpt 2:

"Although classified as TFFE at this point, the estimate for CH-7 is between 3.72 and 6.01 million tonnes from surface to a depth of 290 meters.

“We’ll be able to tell what the potential economics are of CH-7 once we process the 550 tonne bulk sample in August 2015,” Peregoodoff explained.

To consider CH-7 successful, Peregoodoff is hoping for a combined grade and carat value in excess of $125-$150 per tonne, but believes that the 2015 bulk sample result will show value per tonne to be significantly higher than that."

Analysis:

The NPV #3 on this blog used a $200 to $250 CAD per tonne valuation. Not sure if Tom's analysis is CAD$ or US$. He does indicate that it may go much higher. All these values talked about are well within an operating profit margin. 

Excerpt 3:

"Based on CH-6 and CH-7, Peregoodoff also believes a Phase 1 mine development at Chidliak has the potential to produce at least 1 million carats per year."


Analysis:

Based on the fact that CH-6 will be mined first (based on current information), @ 2.58 cpt, that gives a 387K tonne per year mill. Looks like they are considering a 400K tonne per annum as a phase 1 mill and scale up from there as more kimberlites and tonnage get added to the mix. 400K tonnes per year will put less pressure on capital up front and probably mix well with a seasonal road. If they are blending in ch-7 at the same time as ch-6, it probably could be a 500K tonne per annum mill..but it is definitely not the 1 million tonne per annum mill that has been mentioned by 1 or 2 analysts.

Excerpt 4:

"In May 2015, Peregrine became a member of the Diamond Bourse of Canada (DBC), a diamond and gemstone trading facility and industry association.

“For us, [membership] provides a lot of flexibility as we advance toward the development of Chidliak,” Peregoodoff said.

“We have more and more people interested in seeing our goods, and because we’re members, these interested parties are able to get an early indication of what the goods look like, for example, or do any due diligence, if needed.”

To become a member, Peregoodoff explained, companies must be “sponsored” by a current company – De Beers vouched for Peregrine – and go through a review by the DBC to ensure a corporation’s business practices align with the group’s standards of excellence. Membership also requires an evaluation of key team members.

“The DBC looks for companies with a proven track record; they want to see groups that are leading up to – or are in the line of sight for – becoming a diamond producer.”"

Analysis:

This is the first junior and only second mining entity to join this bourse.
It is very interesting that Peregrine Diamonds still has a very close relationpship with De Beers.
De Beers could still very well old the 3+ million shares in Peregrine Diamonds. Looks like networking is going to be the main payoff for Peregrine Diamonds in the future. The value of this networking is still to be determined. Here is a blog post related to this -- Diamond Bourse - Peregrine Diamonds

Well written interview







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